Challenges: During a Military challenge, kneel 2 of your House Stark characters to kill all attacking characters.
Limit 1 per challenge.

We have been playing this card as if the enemy characters do not die until after the challenge resolves, but given the "During" qualification and the fact that they are player action windows both after declaring attackers and after declaring defenders, I've reconsidered. If this is played after attackers are declared but before defenders are declared, is it the case that all the attackers simply die then and there, fizzling the challenge completely assuming none of them are saved? If so, man, this event is way better than I thought.

The attacking characters die immediately when the event resolves (ie, when it it played). If all participating characters die, the challenge just ends.

If you wait until after the challenge resolves to play this, there aren't any attacking characters to kill.

This also means you can use this event during your player actions after declaring a defender. This way, provided Lethal Counterattack killed everyone attacking you, you will win the MIL challenge as the defender.